Molecular Insight Files for Chapter 11

Molecular Insight plans to reorganize under Chapter 11 after its bondholders rejected a $45 million financing commitment.
By Joseph Woelfel ,

CAMBRIDGE, Massachusetts (

TheStreet

) --

Molecular Insight Pharmaceuticals

(MIPI)

plans to reorganize under Chapter 11 bankruptcy protection after its bondholders wouldn't accept a $45 million financing commitment from private-equity firm Savitr Capital.

Molecular Insight, a biopharmaceutical company with a focus on cancer treatments, said the investment from Savitr would be 90% of the company's common stock at 45 cents a share.

The investment was conditioned on a restructuring of its bonds, but bondholders rejected the plan.

"We are very pleased with the Savitr investment commitment and feel that it would provide the company with both the funds and the restructured balance sheet needed to continue our business," said Chairman Joseph Limber, in a statement. "We are disappointed that the bondholders have not accepted the Savitr proposal and that, as a result, we are required to commence chapter 11 proceedings to protect our company's ongoing business."

Molecular Insight said it's "hopeful" it can reach a restructuring agreement with all of its creditors.

CEO and President Daniel Peters and Chief Financial Officer Charles Abdalian resigned as part of the reorganization. Harry Stylli, a director, was named chief restructuring officer and president, the company said.

The stock closed Thursday at 74 cents.

-- Written by Joseph Woelfel

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